People want to know what benefits they will receive from asset management if they commit the time, energy, and resources to the program. I believe it is like most things in life, you get out of it what you put into it.
If you invest heavily in asset management (not necessarily in monetary terms, but in time and effort), you will reap far more benefits than if you choose to give asset management lip service or just do a little bit.
The specific monetary Return on Investment or ROI that any given system would receive from an asset management program is very system or community specific. ROI can be determined by investigating costs and benefits before and after implementing an asset management program or a particular part of an asset management program.
The costs can include what was invested into asset management in terms of any expenses related to purchases or contracts and any costs related to personnel time to complete asset management activities. The benefits can be in any area – reductions in the needs for infrastructure, increased life of an asset, reduced failures – and it is important to be comprehensive when considering benefits.
Presented below are a couple of real-world examples that show the potential to benefit from asset management.
One water utility took on the business case assessment practice. They thoroughly investigated projects to see if they were really needed or needed as proposed. They narrowed project scope and changed some projects as a result. They were able to document $10 M in savings and they documented an investment of $2 M in an asset management program for a net ROI of $8 M. This utility continued to save money on their capital program in subsequent years.
Another utility was looking to replace all of its infrastructure on erroneous assumptions. An asset management program, in which they invested very little, except some of their time, showed that there was a much better option than replacing the infrastructure. They ended up doing a different project that was able to improve customer service for a small fraction of the cost. The original project was estimated at $5 M, while the alternative project they actually ended up doing was approximately $50,000 for a total savings of $4.95 Million.
These are merely two examples. There are many, many examples of various savings that can be obtained from implementing a complete or partial asset management program in all kinds of areas from better maintenance to forestall replacement to reduced infrastructure failures, etc.
I strongly believe that if someone implements asset management following the basic principles of worldwide asset management best practice you will receive more benefits economically than what you put into the program.
If you measure the benefits in terms of the triple bottom line of financial, environmental, and social, your ROI will be even greater.
In my opinion, if asset management is practiced and supported throughout the organization, you simply can’t lose.